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Medicaid Innovation in Medicaid Innovation in Kansas Under the DRAKansas Under the DRA

Andy Allison, PhDMedicaid Director and Deputy Director,

Kansas Health Policy Authority

National Academy for State Health PolicyNational Academy for State Health Policy

Denver, ColoradoDenver, Colorado

October 15 , 2007October 15 , 2007

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Health Policy Needs in KansasHealth Policy Needs in Kansas

Coverage of parents at only one-quarter to one-Coverage of parents at only one-quarter to one-third of the federal poverty levelthird of the federal poverty level

Children’s coverage at much higher levels, but Children’s coverage at much higher levels, but some children will not be enrolled unless parents some children will not be enrolled unless parents are also eligibleare also eligible

Many providers reluctant to expand services Many providers reluctant to expand services provided to Medicaid and HealthWaveprovided to Medicaid and HealthWave

Difficult transition for Medicaid families into Difficult transition for Medicaid families into private, and privately-funded, health coverageprivate, and privately-funded, health coverage

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Need for Flexibility to Address Need for Flexibility to Address Health Policy Needs in KansasHealth Policy Needs in Kansas

Basic Federal mandates Basic Federal mandates • All-or-nothing, one-size fits all Medicaid benefitsAll-or-nothing, one-size fits all Medicaid benefits• Extends regulatory relationship with providersExtends regulatory relationship with providers

Kansas’ political environment unreceptiveKansas’ political environment unreceptive• Though certainly not monochrome, Kansas is mostly redThough certainly not monochrome, Kansas is mostly red• Legislative funding on a quasi-entitlement basisLegislative funding on a quasi-entitlement basis• Difficult to extend the “entitlement”Difficult to extend the “entitlement”

Bottom line Bottom line Kansas and other states leave Federal matching dollars Kansas and other states leave Federal matching dollars on the table (and yield Federal taxes to other states)on the table (and yield Federal taxes to other states)

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Medicaid Provisions in the DRAMedicaid Provisions in the DRA

• DRA establishes flexibility through:DRA establishes flexibility through:• Medicaid benefit designMedicaid benefit design• Benchmark plansBenchmark plans• Cost Sharing provisionsCost Sharing provisions• Health opportunity accountsHealth opportunity accounts

Also…Also…• Fraud, abuse, and integrityFraud, abuse, and integrity• Investments in innovation Investments in innovation • Federal cost-saving financing measuresFederal cost-saving financing measures

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Benchmark PlansBenchmark Plans• States may elect to move certain populations into States may elect to move certain populations into

benefit plans equivalent to:benefit plans equivalent to: Federal employee BC/BSFederal employee BC/BS State employee benefit planState employee benefit plan Largest State commercial MCOLargest State commercial MCO Secretary approved planSecretary approved plan Or, actuarial equivalent of theseOr, actuarial equivalent of these

• States may design plans that reduce coverage States may design plans that reduce coverage options for some non-mandatory populationsoptions for some non-mandatory populations

• Cannot cover new eligibility categories using DRA/SPACannot cover new eligibility categories using DRA/SPA• Can cover de-linked, expanded 1931 parent populationCan cover de-linked, expanded 1931 parent population

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Innovative DRA-based Reforms Innovative DRA-based Reforms Underway in KansasUnderway in Kansas

• Work Opportunities Reward KansansWork Opportunities Reward Kansans (WORK)(WORK)

• Premium AssistancePremium Assistance

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WORKWORK

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Working HealthyWorking Healthy Family of Family of Programs for the DisabledPrograms for the Disabled

• In 2001, the Kansas Legislature approved the development of a In 2001, the Kansas Legislature approved the development of a “Buy In” program called “Buy In” program called Working Healthy: Making Health Care Working Healthy: Making Health Care Work.Work.

• Working Healthy Working Healthy is now a family of programs is now a family of programs • Kansas’ version of Medicaid Buy-In, a work incentive authorized under Kansas’ version of Medicaid Buy-In, a work incentive authorized under

“Ticket-to-Work” legislation“Ticket-to-Work” legislation• Designed for people with disabilities who are working, or interested in Designed for people with disabilities who are working, or interested in

competitive, integrated employmentcompetitive, integrated employment• Allows those with severe disabilities to return to or increase their work Allows those with severe disabilities to return to or increase their work

effort – i.e., earn more -- without losing critical Medicaid coverageeffort – i.e., earn more -- without losing critical Medicaid coverage• Encourages people to work, increase their income and accumulate Encourages people to work, increase their income and accumulate

assets in order to reduce long term reliance on public supportsassets in order to reduce long term reliance on public supports

• Smoothes impact of all-or-nothing Medicaid benefits. Compare to:Smoothes impact of all-or-nothing Medicaid benefits. Compare to:• Earned income tax credits (for cash benefits)Earned income tax credits (for cash benefits)• Transitional Medicaid assistance (6- or 12-month Medicaid benefits)Transitional Medicaid assistance (6- or 12-month Medicaid benefits)

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Working HealthyWorking Healthy Eligibility CriteriaEligibility Criteria

Two Medicaid eligibility categories: Two Medicaid eligibility categories: BasicBasic - applies to people who meet Social Security Disability definition - applies to people who meet Social Security Disability definition

(other than income)(other than income) Medically improvedMedically improved - applies to people who no longer meet the SSA - applies to people who no longer meet the SSA

definition of disability due to medical improvementdefinition of disability due to medical improvement

Designed for working-age (otherwise) disabled adultsDesigned for working-age (otherwise) disabled adults 16-64 years of age16-64 years of age Determined disabled by SSADetermined disabled by SSA Verified earned income subject to FICA/SECAVerified earned income subject to FICA/SECA Kansas residentKansas resident

Meet financial tests less restrictive that HCBSMeet financial tests less restrictive that HCBS Countable earned income up to 300% Federal Poverty LevelCountable earned income up to 300% Federal Poverty Level Cash assets up to $15,000Cash assets up to $15,000 Retirement accounts allowed (no limit)Retirement accounts allowed (no limit) Individual Development Accounts allowed (no limit)Individual Development Accounts allowed (no limit) Elimination of spend down requirements (premiums if above poverty)Elimination of spend down requirements (premiums if above poverty)

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Overview of Kansas’ New Overview of Kansas’ New WORK WORK ProgramProgram

• Work Opportunities Reward Kansans (WORK) Work Opportunities Reward Kansans (WORK) is a new, complimentary is a new, complimentary program called program called iimplemented on July 1, 2007mplemented on July 1, 2007

• Is a “package” of benefits for people who need personal assistance Is a “package” of benefits for people who need personal assistance services and want to enrollservices and want to enroll in in Working HealthyWorking Healthy

• Is the result of a Medicaid State Plan Amendment, approved under the Is the result of a Medicaid State Plan Amendment, approved under the Deficit Reduction Act – State Flexibility in Benefit Packages (Section 6044)Deficit Reduction Act – State Flexibility in Benefit Packages (Section 6044)

• Offers a Secretary Approved Benchmark Benefit PackageOffers a Secretary Approved Benchmark Benefit Package

• Incorporates a “Cash and Counseling” model in the benefit package, the Incorporates a “Cash and Counseling” model in the benefit package, the first in the country to be done with a Medicaid State Plan Servicefirst in the country to be done with a Medicaid State Plan Service

• Allows consumers to directly manage their fundsAllows consumers to directly manage their funds

• Offers flexibility in which services are purchased, and how they are Offers flexibility in which services are purchased, and how they are purchasedpurchased

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WORK WORK EligibilityEligibility

• Eligible for Eligible for Working Healthy, i.e., Working Healthy, i.e., Medicaid Buy-InMedicaid Buy-In• Eligible for, on the waiting list for, or meet level of care for Eligible for, on the waiting list for, or meet level of care for

HCBSHCBS

• Physical Disability WaiverPhysical Disability Waiver• Developmental Disability WaiverDevelopmental Disability Waiver• Traumatic Brain Injury WaiverTraumatic Brain Injury Waiver

• Competitively employed in an integrated settingCompetitively employed in an integrated setting

• Reside in a home that is not owned, operated, or controlled Reside in a home that is not owned, operated, or controlled by a provider of services, unless that provider is related by by a provider of services, unless that provider is related by blood or marriageblood or marriage

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Working Healthy/WORK Working Healthy/WORK BenefitsBenefits

• Full Medicaid coverageFull Medicaid coverage• Personal care and other services if neededPersonal care and other services if needed• Medicare coverage paid by Medicaid (in Medicare coverage paid by Medicaid (in

some instances employer premiums are some instances employer premiums are paid)paid)

• Benefits planningBenefits planning• Alternative and cost effective methods to Alternative and cost effective methods to

obtain assistanceobtain assistance• Work related support services Work related support services

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WORKWORK Services Package Services Package• Needs AssessmentNeeds Assessment

• Monthly allocation to purchase personal servicesMonthly allocation to purchase personal services

• Assistive ServicesAssistive Services

• Independent Living CounselingIndependent Living Counseling

• Benefits Specialists ServicesBenefits Specialists Services

• Temporary Unemployment CoverageTemporary Unemployment Coverage

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Advantages of Using DRA to Advantages of Using DRA to Implement Implement WORKWORK

• The DRA Benchmark Benefits provision provided the greatest flexibility, The DRA Benchmark Benefits provision provided the greatest flexibility, enabling coverage of personal care assistance without need of a waiver. enabling coverage of personal care assistance without need of a waiver.

• WORKWORK began as an 1115 Independence Plus waiver application began as an 1115 Independence Plus waiver application

• CMS reviewed for three years; numerous requests for additional information; CMS reviewed for three years; numerous requests for additional information; final decision never madefinal decision never made

• Following one TA call with Family and Children Health Programs Group, SPA Following one TA call with Family and Children Health Programs Group, SPA submitted and approved one month latersubmitted and approved one month later

• Unlike most waivers, Unlike most waivers, WORKWORK allows consumers with various disabilities, allows consumers with various disabilities, including developmental disabilities, to be served within the same including developmental disabilities, to be served within the same program. KHPA believes this will promote competitive, integrated program. KHPA believes this will promote competitive, integrated employment for adults with disabilities.employment for adults with disabilities. Examples include: Examples include:

• Encourages people to earn money while removing fear of losing needed personal Encourages people to earn money while removing fear of losing needed personal attendant servicesattendant services

• Eliminates the disincentive of having to spend earnings on medical services in order Eliminates the disincentive of having to spend earnings on medical services in order to maintain Medicaid coverageto maintain Medicaid coverage

• For people with mental retardation, offers support services to live and work in the For people with mental retardation, offers support services to live and work in the community instead of sheltered workshops and group homescommunity instead of sheltered workshops and group homes

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Advantages of Advantages of WORK WORK • WORK WORK permits direct cash payments to consumers to pay for their services, which permits direct cash payments to consumers to pay for their services, which

may facilitate more cost-effective decision-making regarding services and service may facilitate more cost-effective decision-making regarding services and service providers.providers.

• Purchase a service as a substitute to attendant care, e.g., laundry service versus Purchase a service as a substitute to attendant care, e.g., laundry service versus attendant doing laundryattendant doing laundry

• WORK WORK provides consumers with the ability to “control” their services, rather than just provides consumers with the ability to “control” their services, rather than just to “direct” them, potentially increasing consumer satisfaction.to “direct” them, potentially increasing consumer satisfaction.

• Purchase services that meet their unique needs and life stylePurchase services that meet their unique needs and life style• Choose providers of services based on personal preference rather than limited to a Choose providers of services based on personal preference rather than limited to a

disability specific agency or geographic location disability specific agency or geographic location • Determine wages, potentially improving attendant retention Determine wages, potentially improving attendant retention

• May increase the number of Kansans with disabilities who are employed, contributing May increase the number of Kansans with disabilities who are employed, contributing to the economy, paying taxes. Reducing poverty may also result in improved quality-to the economy, paying taxes. Reducing poverty may also result in improved quality-of-life and health outcomes.of-life and health outcomes.

• 43 year old female, wheelchair mobile and employed part-time in a hospital clerical 43 year old female, wheelchair mobile and employed part-time in a hospital clerical position. Currently on PD Waiver w/ client obligation of $500+. Premium for position. Currently on PD Waiver w/ client obligation of $500+. Premium for WH/WORK will be $69. Can now increase the number of work hours without having to WH/WORK will be $69. Can now increase the number of work hours without having to give up those earnings.give up those earnings.

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Premium AssistancePremium Assistance

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Health Reform Legislation Health Reform Legislation Passed Unanimously by Kansas Passed Unanimously by Kansas

Legislature May 2007Legislature May 2007

SB11 authorized a significant DRA expansion of SB11 authorized a significant DRA expansion of coverage, and encourages the Kansas Health coverage, and encourages the Kansas Health Policy Authority (KHPA), with consultation of the Policy Authority (KHPA), with consultation of the Joint Health Policy Oversight Committee, to Joint Health Policy Oversight Committee, to consider as part of health reform in Kansas various consider as part of health reform in Kansas various Medicaid reform options provided through the Medicaid reform options provided through the Deficit Reduction Act (DRA).Deficit Reduction Act (DRA).

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Authorizing Language for Authorizing Language for Premium Assistance in SB11Premium Assistance in SB11

The KHPA’s programs (now) include . . . “a phased-The KHPA’s programs (now) include . . . “a phased-in premium assistance plan to assist eligible low in premium assistance plan to assist eligible low income Kansas residents with the purchase of income Kansas residents with the purchase of private insuranceprivate insurance or other benefits that are or other benefits that are actuarially equivalent to the actuarially equivalent to the Kansas state Kansas state employee health planemployee health plan under a program under a program authorized under subsection (a)(1). . . The Kansas authorized under subsection (a)(1). . . The Kansas Health Policy Authority is authorized to seek any Health Policy Authority is authorized to seek any approval from the Centers for Medicare and approval from the Centers for Medicare and MedicaidMedicaid services necessary to accomplish the services necessary to accomplish the development or expansion of premium assistance development or expansion of premium assistance programs for families.”programs for families.”

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SB11 Objectives and the SB11 Objectives and the Proposal in BriefProposal in Brief

• Ensure access to affordable healthcare for families living in Ensure access to affordable healthcare for families living in poverty by extending coverage to parents of Medicaid-poverty by extending coverage to parents of Medicaid-eligible childreneligible children

• Protect benefits currently offered to childrenProtect benefits currently offered to children• Bring parents and children into the same private health Bring parents and children into the same private health

plansplans• Increase participation by eligible childrenIncrease participation by eligible children• Expand coverage solely through private health plansExpand coverage solely through private health plans• Put parental benefits on a par with privately-insured Put parental benefits on a par with privately-insured

familiesfamilies• Provide health plan choices available to low-income familiesProvide health plan choices available to low-income families• Prepare the way for further reformsPrepare the way for further reforms• Draw in Federal funds and take advantage of Deficit Draw in Federal funds and take advantage of Deficit

Reduction Act (DRA) flexibilitiesReduction Act (DRA) flexibilities

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Target PopulationTarget Population

• The plan extends private coverage to parents The plan extends private coverage to parents (“caretakers”) living in poverty.(“caretakers”) living in poverty. Currently, only parents below 25-36% of the Federal Currently, only parents below 25-36% of the Federal

Poverty Level (FPL) are eligible.Poverty Level (FPL) are eligible. Expansion phased in FY 2008-2010Expansion phased in FY 2008-2010

• All Medicaid families under poverty will All Medicaid families under poverty will participate. participate. Children will participate with their parents in the same Children will participate with their parents in the same

health planshealth plans Those eligible under current rules will receive Those eligible under current rules will receive

supplemental benefits to ensure full Medicaid coveragesupplemental benefits to ensure full Medicaid coverage Disabled children under poverty are not expected to Disabled children under poverty are not expected to

participate and will remain in Medicaidparticipate and will remain in Medicaid

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Populations Covered by Populations Covered by Premium AssistancePremium Assistance

Not Available

Enroll with children in an employer-sponsored or state-procured option

Parents 37%-100% of poverty

Provided to ensure Medicaid-equivalent benefits

Enroll with children in an employer-sponsored or state-procured option

Parents below 37% of poverty

Provided to ensure Medicaid-equivalent benefits

Remain enrolled with children in an employer-sponsored or state-procured option

Pregnant mothers below 100% of poverty

Provided to ensure Medicaid-equivalent benefits

Enroll with parents in an employer-sponsored or state-procured option

Non-disabled children under 100% of poverty

Supplemental benefitsPrivate benchmark coverage 

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Employer-sponsored plan optionEmployer-sponsored plan option

• For income-qualified families who have access to For income-qualified families who have access to employer sponsored health insurance that meets employer sponsored health insurance that meets minimum qualifications, Medicaid will pay the minimum qualifications, Medicaid will pay the employee share of family coverage.employee share of family coverage. Medicaid application forms will be modified to obtain Medicaid application forms will be modified to obtain

information about job-based coverage optionsinformation about job-based coverage options The most successful buy-in programs reimburse families The most successful buy-in programs reimburse families

directly for their share of the premiumdirectly for their share of the premium There is no requirement for employers to offer health There is no requirement for employers to offer health

plans that meet the minimum criteria plans that meet the minimum criteria Minimum qualifications will be based on cost-Minimum qualifications will be based on cost-

effectiveness and actuarial value of state employee effectiveness and actuarial value of state employee health planhealth plan

Exploring ways to make evaluations of employer plans Exploring ways to make evaluations of employer plans simplesimple

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State-procured plan optionsState-procured plan options• When a family does not have access to an When a family does not have access to an

employer-sponsored plan, Medicaid will employer-sponsored plan, Medicaid will pay the full premium for children and their pay the full premium for children and their parents to enroll in private plans that parents to enroll in private plans that contract with the state for this purpose.contract with the state for this purpose. Families will be given information about each Families will be given information about each

plan and asked to select a plan for their family plan and asked to select a plan for their family at the time they enrollat the time they enroll

Requesting input on the nature and number of Requesting input on the nature and number of plan optionsplan options

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Supplemental benefitsSupplemental benefits• Adults and children participating in premium assistance Adults and children participating in premium assistance

who are already eligible for Medicaid under current rules who are already eligible for Medicaid under current rules will receive supplemental assistance to maintain Medicaid will receive supplemental assistance to maintain Medicaid benefits.benefits. For families enrolling in employer-sponsored plans, For families enrolling in employer-sponsored plans,

supplemental benefits are expected to be provided in the form supplemental benefits are expected to be provided in the form of an additional Medicaid card for presentation to providers.of an additional Medicaid card for presentation to providers.

For families selecting a state-procured plan, supplemental For families selecting a state-procured plan, supplemental benefits may be provided through behind-the-scenes benefits may be provided through behind-the-scenes coordination of benefits. coordination of benefits.

Soliciting input on ways to ease the burden of this coordination Soliciting input on ways to ease the burden of this coordination of benefits.of benefits.

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Key Design IssuesKey Design Issues

• Employer contributionEmployer contribution• Coordination of benefitsCoordination of benefits• Provider payment ratesProvider payment rates• Allocation of risk and populationAllocation of risk and population• Opportunities to emphasize Opportunities to emphasize

and/or test consumer-driven and/or test consumer-driven conceptsconcepts

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TimelineTimeline May 2007 May 2007 Passage of SB 11 authorizing premium Passage of SB 11 authorizing premium

assistanceassistance Summer 2007 Summer 2007 Stakeholder input into the design of the Stakeholder input into the design of the

premium assistance programpremium assistance program September 2007 September 2007 Formal request for information from Formal request for information from

potential bidders begins the procurement process: begin potential bidders begins the procurement process: begin CMS approval processCMS approval process

December 2007 December 2007 Issue request for proposals from private Issue request for proposals from private plans for procured optionsplans for procured options

Spring 2008 Spring 2008 KHPA procures private plans to be offered to KHPA procures private plans to be offered to those without access to employer-sponsored plansthose without access to employer-sponsored plans

January 2009 January 2009 Implement phase I expansion for families Implement phase I expansion for families up to 50% of povertyup to 50% of poverty

July 2009 July 2009 Implement expansion up to 75% of povertyImplement expansion up to 75% of poverty July 2010 July 2010 Implement expansion up to 100% of povertyImplement expansion up to 100% of poverty

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